I was reading an article today discussing the large number of American goods in Cuba, and how that proves that U.S. trade sanctions are failing against that country.

While I have often said that the sanctions need to be less rigid and tuned more towards working with the private sector, I think the article missed out on a key point. A large number of the products supposedly produced by U.S. companies that are later found in sanctioned countries are often high quality knock offs. Those knock offs are produced in many of the same factories in Southeast Asia were a lot of the real products are manufactured. Therefore, you can not fully fault the U.S. based companies.

That point aside, I’d like to talk about a comment contained in this article by an executive of a major shoe company which reads as follows:

The executive states that the company complies with the embargo, but speculated that the sneakers may have been purchased from the company’s independent Central American distributor that operates out of the duty-free zone in Colon, Panama. Entrepreneurs from across the Caribbean stock up on a variety of goods in Colon for resale, he said.

Ok, fair enough, but why would you say it? That comment could lead one (i.e., me) to believe that you are aware that this is going on and you are still exporting to these distributors in Central America. Bad idea.

Obviously the Cuban trade sanctions do not permit the sale of goods for re-export to Cuba. Thus, if you have reason to believe that type of activity is going on, you had better take steps to put a stop to it.

In all fairness to the executive and the company, they may very well be operating pursuant to a specific license or have a very thorough compliance program in place. But why would you even allude to the other scenario? It just boggles my mind.

The appropriate response to any questions about how these goods are getting into Cuba would have been the one provided in the article by Kim Freeman, a GE spokeswoman, who said she could not explain how the company’s microwave ovens ended up in Cuba. She stated in part, “G.E. consumer industrial agreements with our distributors require them to comply with U.S. trade control regulations, which prohibit sales by U.S. companies to Cuba, we will investigate and take appropriate action if we confirm those agreements have been breached.”

As an attorney working in the field of U.S sanctions law that statement was music to my ears. Kudos Ms. Freeman.